SWM - Mark Moore

Operating Expense RatioThe operating expense ratio is a profitability ratio that allows investors to see how higha firm’s selling and administrative expenses are relative to its sales. A high operating expenseratio indicates that a firm is not adequately controlling costs and may have inflated prices inorder to cover what may be unnecessary costs. To calculate the operating expense ratio,simply divide selling and administrative expenses by sales. The following graph shows theresults from calculating the operating expense ratio.Axis Title 20 18 16 14 12 10 8 6 4 2 0 Operating Expense Ratio 2004 2005 2006 2007 2008 Schweitzer Universal Alliance Industry Avg. SWM (Restated) 118